Thursday, March 09, 2017

Forget Facebook and Google: The ad world thinks this tech giant is 'terrifying'

This Mashable article announces that Amazon has been slowly and insidiously encroaching upon Facebook and Google's dominance in the online advertising space: "While Amazon's ads currently comprise less than two percent of the digital market — Facebook and Google collectively control two-thirds — its most recent earnings release last month revealed that ad revenue grew the most of any part of the company for the quarter — a 60-percent jump from the same period in 2016."
While Snapchat grabs headlines, Amazon stands to earn more than $1 billion in ad revenue, which dwarf's the trendy social media platform's projected sales. As the article points out, although Google and Facebook may know about consumers' search and social behaviors online, Amazon has a treasure trove of information related to spending habits - data which may be more targeted and valuable in terms of selling relevant ads. 

Amazon's strategy makes sense, and I think the revenue channel is only going to increase as loyal customers install Echo and Echo Dot machines in their homes, which only supplies more lucrative data for Amazon's advertiser clients. As a consumer, I think it's a welcome targeting strategy. Unlike Google and Facebook environments where ads can be annoying, targeted ads in Amazon and from Amazon are expected, if not welcome, since its actually an ecommerce platform. When you use Amazon, you actually expect to buy something. My only concern, however, is that the reviews in Amazon will become a hotbed for advertisers to further push their products rather than being a forum for objective, humanistic reviews of products. Amazon must be judicious in how it allows its ad clients to take advantage of its platform, lest customers lose trust in Customer Reviews, an almost sacred place where customers expect to hear directly from their peers. If abused, consumers may go to other platforms where they think they can find trusted reviews. 

in conclusion, although a potentially risky move, Amazon's strategy of increasing ad sales dovetails with ecommerce platform.  

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